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Exelon's proposed Annova LNG in Texas passes FERC staff environmental review

Exelon Corp.'s Annova LNG export project cleared a draft environmental review by Federal Energy Regulatory Commission staff, a significant step toward authorization for the proposed Brownsville, Texas, terminal that would add 6 million tonnes per annum to U.S. gas liquefaction capacity.

The draft environmental impact statement, issued Dec. 14, found that the Annova project would do some harm to the environment. But those impacts "would be reduced to less than significant levels" if proposed mitigation measures are adopted. (FERC docket CP16-480)

"This draft EIS follows an extensive FERC review of Annova LNG's application, coordination with stakeholder regulatory agencies, and hundreds of questions answered by our team of engineers," Annova LNG CEO Omar Khayum said in a statement. "Given our efforts to minimize and mitigate our environmental impacts, including the use of electric motor-driven equipment that reduce regional air emissions significantly, we are confident that we have a project that meets or exceeds federal and state regulations."

Exelon is targeting a final investment decision on the project near the Texas-Mexico border in late 2019 and starting commercial operations in 2024.

FERC will use the staff's findings in the environmental review to help prepare a decision on a Natural Gas Act certificate that would provide federal authorization for the project.

In giving Annova LNG a passing grade, FERC staff also repeated a finding from draft environmental reviews for two other proposed LNG terminals that has raised questions about the possibility of permitting challenges ahead for the projects. FERC staff found that the three LNG export terminals being built around the same time in Brownsville would result in "significant cumulative impacts" such as shoreline erosion and habitat loss for some protected species.

FERC staff have also cleared the other two projects: NextDecade Corp.'s 27-mtpa Rio Grande LNG terminal and Texas LNG LLC's up-to-4-mtpa Brownsville terminal. (FERC dockets CP16-454, CP16-455 and CP16-116)

All three project developers have said they do not think FERC staff's cumulative impacts finding will be an obstacle.

"Annova LNG expects and welcomes FERC's evaluation of the cumulative impacts associated with the three Brownsville LNG projects," Annova project spokesman Jimmy Porch said in October.

Annova's CEO specifically addressed some elements of the cumulative-impacts finding in the company's Dec. 14 statement. "Annova LNG is pleased FERC has acknowledged our proactive approach towards minimizing and offsetting the project's environmental impacts," Khayum said.

A comment period on the draft review will close Feb. 4, 2019.

The three proposed Brownsville export terminals were among a dozen LNG projects to receive updated schedules for environmental reviews from FERC in late August as part of the agency's effort to work through a backlog of applications.